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PRESS RELEASE
GOVERNMENTS CAN TURN THE TIDE AGAINST PIRACY IN 2011
First actions by ISPs to stop mass illegal file-sharing announced in France, Ireland
and South Korea in 2010
Progress expected in UK, New Zealand, the EU and Malaysia in 2011
Digital revenues up six per cent to US$4.6 billion in 2010, with 400+ licensed
services
Piracy is hitting jobs and investment, according to IFPI Digital Music Report
London, 20th January 2011 Action to stop digital music piracy is gaining momentum
worldwide, with implementation by ISPs of warnings and deterrent sanctions taking effect in
three countries in 2010 and governments in other countries expected to implement measures
in 2011.
ISP cooperation measures are now in place aimed at substantially reducing illegal file-sharing
in France, South Korea and Ireland. Governments in several other countries, including the
UK, New Zealand and Malaysia, are expected to implement new laws in 2011 and the
European Union is reviewing its intellectual property enforcement legislation.
A comprehensive overview of the global digital music sector is provided in IFPIs Digital
Music Report 2011, published today. The report shows that consumer choice for accessing
music via digital channels continued to grow in 2010. New easy-to-use subscription models,
such as Spotify, Deezer and Vodafone, expanded to complement the hundreds of download
services already available to fans. Record companies have also partnered with ISPs and
mobile operators to offer music services in Ireland, Taiwan, Italy, South Korea, Denmark,
Norway and Sweden.
Digital music revenues grew by an estimated six per cent globally in 2010 to US$4.6 billion,
accounting for 29 per cent of record companies trade revenues in 2010.
Industry action is helping develop this legitimate business. Limewire, the biggest source of
infringing downloads in the US, has been declared illegal and Mininova, a major BitTorrent
site, shut down its illegal activities. The Pirate Bay was blocked by a court in Italy and its
operators criminal convictions were upheld by the Court of Appeal in Sweden.
Despite these developments, however, digital piracy continues to massively erode industry
revenues, hitting jobs, investment in new music and consumer choice. The report
comprehensively reviews the scale and impact of the problem. Notably:
Fewer new artists are breaking through globally. Total sales by debut artists in the
global top 50 album chart in 2010 were just one quarter of the level they achieved in
2003
Traditionally vibrant music local industries, such as Spain and Mexico, are especially
hard hit. In Spain, where music sales fell by an estimated 22 per cent in 2010, no new
home-grown artist featured in the countrys top 50 album chart, compared with 10 in
2003
Jobs are at risk across the creative industries. Independent research in 2010 from Tera
Consultants, backed by trade unions, found that 1.2 million jobs could be lost across
the creative industries in Europe alone by 2015 if no action is taken to tackle piracy.
Frances Moore, chief executive of IFPI, says: Many governments are now recognising the
need for proportionate and effective steps to curb piracy. In the last year, France and South
Korea implemented systems of warnings and deterrent sanctions that will for the first time
engage ISPs in reducing peer-to-peer infringement on their networks.
Similar moves are underway in the UK, New Zealand and Malaysia. The European Union
is reviewing its enforcement legislation. The momentum for a solution is building, and that is
grounds for optimism.
As we enter 2011, digital piracy, and the lack of adequate legal tools to fight it, remains the
biggest threat to the future of creative industries. Great new legitimate music offerings exist
all over the world, offering consumers a wide range of ways to access music. Yet they
operate in a market that is rigged by piracy, and they will not survive if action is not taken to
address this fundamental problem. This is the challenge and the opportunity for governments
to seize in 2011.
For further information contact:
Adrian Strain/Alex Jacob
IFPI Communications
+44 (0)207 878 7935
Press-office@ifpi.org
To order hard copies of the report please email laura.childs@ifpi.org
Notes to editors:
About IFPI
IFPI is the organisation that promotes the interests of the international recording industry
worldwide. Its membership comprises some 1,400 major and independent companies in more
than 66 countries. It also has affiliated industry national groups in 45 countries. IFPIs
mission is to promote the value of recorded music, safeguard the rights of record producers
and expand the commercial uses of recorded music in all markets where its members operate
Piracy trends vary markedly by country, with independent research suggesting Spain and
Brazil are among the markets most hit, with 45 per cent and 44 per cent of active internet
users respectively using unlicensed services monthly (The Nielsen Company). This
compares with an average across the EU top five markets of 23 per cent.
Yet even in countries with comparatively low levels of usage of unlicensed services, the
volume of unauthorised music consumption vastly eclipses the volume of legal music
consumption. In the UK, for example, 76 per cent of the music obtained online in 2010 was
unlicensed (Harris Interactive).
Third-party research consistently shows the vast majority of content distributed on filesharing networks is copyright infringing. The Internet Commerce Security Laboratory found
in April 2010 that 89 per cent of torrent files from a representative sample linked to
infringing content. Professor Waterman of Pennsylvania University found in October 2010
that 98.8 per cent of the files requested from a representative sample available through
Limewire were not authorised for free distribution.
Independent research consistently shows that availability of content for free is the main driver
of online piracy. In 2010, new surveys confirmed this trend in Sweden (GfK), Australia (CCi
Digital Futures), the UK (Harris Interactive) and China (The Nielsen Company).
A study by Adermon & Liang of Uppsala University in Sweden found that physical music
sales would be 72 per cent higher and digital music sales 131 per cent higher in the absence
of piracy. The researchers concluded piracy is the main cause of the decline in sales.
In Spain, the recorded music market declined by an estimated 22 per cent in 2010 and no new
local artists broke into the countrys top 50 album chart compared with 10 back in 2003. In
Mexico, investment in artists has fallen by 69 per cent since 2005 and domestic releases have
declined by 45 per cent. In the US, the number of people employed as musicians fell by 17
per cent between 1999 and 2009 off the back of a 53 per cent decline in record sales.
A similar trend is now appearing internationally. The trend in global top 50 album sales in
recent years shows a striking decline in both the number and proportion of successful releases
globally by new artists. Between 2003 and 2010, the combined sales of debut albums
featuring in the global top 50 fell by 77 per cent, from 47.7 million to 10.8 million (January
to November). At the same time the number of debut albums in the global top 50 has fallen,
from 10 in 2003 to seven in 2010.
The live performance market offers no guarantee of growing revenues. Pollstar reported that
box office sales of the worlds top 50 tours fell by 12 per cent in 2010 to US$2.9 billion.
The top touring performers were Bon Jovi, AC/DC, U2, Lady Gaga and Metallica, all acts
with extensive catalogues established through record sales.
Trade unions have responded to the threat to jobs by urging policymakers to take action.
Brendan Barber, the general secretary of the UKs Trade Union Congress, says: There is still
time to act before the creative industries suffer catastrophic loss, but our fear is that not
enough has been done and governments are too willing to respond to those who portray theft
and freedom. We feel the onus is on ISPs to play their part in countering piracy.
Young People, Music and the Internet This guide for parents and teachers, published
in cooperation with international childrens charity Childnet, is currently available in
English and Spanish with further translations planned. A UK adaptation was also
backed by the film and television industries - www.childnet.com/downloading.
Music Matters This programme was launched in the UK by artists, retailers,
songwriters, managers and record labels. It aims to remind people of the value of
music and highlights licensed services www.whymusicmatters.org.
Pro-music An international information campaign about online music supported by
major and independent record companies, music publishers, artists and retailers. It
provides details of the 400+ legal music services worldwide www.pro-music.org.
Pop4Schools A new programme run by an independent company that enables
primary school children to gain a better understanding of how music is produced.
Children role-play various roles in the process of creating and promoting a piece of
music as they learn core curriculum subjects www.pop4schools.com.
Artist
Ke$ha
Lady Gaga feat. Beyonc
Eminem feat. Rihanna
Lady Gaga
Usher feat. Will.i.am
Katy Perry
Train
Justin Bieber
Black Eyed Peas
Paramore
Title
TiK ToK
Bad Romance
Love The Way You Lie
Telephone
OMG
California Gurls
Hey, Soul Sister
Baby
I Gotta Feeling
crushcrushcrush
Sales (m)
12.8
9.7
9.3
7.4
6.9
6.7
6.6
6.4
6.1
6.1